Consequences of Missing FBAR Deadline: Understanding What Happens if You Forget to File

Forgetting to file your FBAR, or Foreign Bank Account Report of Foreign Bank and Financial Accounts, can have serious repercussions, ranging from penalties to potential legal issues. This article will guide you through the consequences of missing your FBAR deadline and provide you with actionable steps to take if you've missed it.

What Happens if You Fail to File Your FBAR

Non-compliance with the FBAR filing requirement can lead to substantial penalties and, in some cases, criminal prosecution. Here are the key points to consider:

Willful Violations vs. Non-Willful Violations

Depending on whether your failure to file was willful or non-willful, the penalties and consequences will vary:

Willful Violations: If the failure to file was willful, meaning it was done with intentional disregard for the law, you could face prosecution. In addition, you may be subject to $100,000 in fines, or five times the amount in the account, whichever is greater. Non-Willful Violations: If the failure to file was not willful, you will still face significant penalties. The penalty for non-willful violations is set at $10,000. Furthermore, you will be required to pay interest on the underpayment of tax due to the failure to file.

Penalties for Late Filing

If you miss the filing deadline, the penalties can be quite severe. Depending on the circumstances, you may be subject to:

A $10,000 penalty for non-willful violations A $100,000 penalty or five times the amount in the account, whichever is greater, for willful violations Interest on any underpayment of tax due to the failure to file

Deferred Reporting for Disaster-Affected Areas

For individuals in states affected by recent hurricanes, such as Texas and Florida, there are special provisions. Individuals in these areas have until January 31, 2018, to file their FBARs without facing additional penalties. This delay is intended to provide relief and ensure compliance for those impacted by natural disasters.

Steps to Take if You Missed the FBAR Deadline

It is generally better to file your FBAR late than to face the potential consequences of non-compliance. Here are some steps you can take:

Read the Official Guidelines

Start by reviewing the official Report of Foreign Bank and Financial Accounts (FBAR). Specifically, scroll to the section on delinquent FBAR submissions. This section will provide you with detailed guidance on what to do if you have missed the filing deadline.

Submit Your FBAR as Soon as Possible

Visit the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) website to submit your FBAR. Prompt submission will help mitigate potential penalties and demonstrate your commitment to compliance. As stated on the FinCEN website, the fines and penalties for non-filers are significantly higher than those for late filers.

Conclusion

Forgetting to file your FBAR can lead to severe penalties and other legal issues. However, by taking the necessary steps as soon as you realize your mistake, you can minimize these consequences. It is crucial to review the official guidelines, submit your FBAR as soon as possible, and stay informed about any deferred reporting options that may be available to you. Remember, the penalties for non-filers are much higher than those for late filers, so it is always better to file as soon as you realize your mistake.